Reducing Last Mile Delivery Costs


There’s more to the term ‘’last mile’’ in the supply chain and logistics industry. It’s more than a buzzword, entailing the transportation of items to their final destination. Within the transport field, last mile delivery plays such a pivotal role when it comes to maintaining customer satisfaction.

By using metrics of last mile delivery, it’s possible to measure the performance of your fleet. Nonetheless, challenges in reaching the end users and inefficiency of delivering goods normally triggers last mile issues related to ballooning transport expenses.

So how can your company mitigate the cost of last-mile delivery? Is there any way you can facilitate fleet management? Are there any intriguing tools, which you can utilize to anticipate, avoid, or mitigate vehicle problems?

Route Optimization Software

An optimized route plan is one of the best ways to reduce costs. By using route optimization software, it’s very much possible to establish best routes and assign orders depending on things such as:

  • Loads
  • Number of vehicles
  • Time windows of stores
  • Depots
  • Time arrival estimation
  • Traffic conditions
  • Volumes

Rather than manually planning, an ideal route optimization system assists you to allocate resources and time more economically and efficiently thereby ensuring you reduce fuel expenses, overhead costs, and operational costs.

Optimizing Load Distribution

What is load distribution? It basically refers to the allotment of goods that are loaded on a fleet to make maximum use of capacity. The main goal is to minimize response time and maximize resource utilization without having to overload any resources.

For a company to enjoy better load distribution, all you need to do is to reduce the human resources and number of vehicles. In doing that, you’ll manage to increase accuracy and efficiency as well as reduce costs.

Your Warehouses In Urban Areas

The other way to bring down last mile costs is by making sure that all your warehouse are situated in urban areas, close to end-user places. Based on your business, different kinds of warehouses exist. Instead of having countless middle distribution channels, urban warehouses are currently close to highly populated areas to ensure a more convenient and quicker shipping.

Goods are usually transported from the production sites, then stored in the warehouse and finally delivered to end customers. Doing this goes miles to lessen last mile delivery costs while at the same time enhancing the responsiveness and speed of the supply chain.

Opt For Fit-for-purpose Vehicles

Your company must reckon vehicle alternatives according to certain purposes, traffic conditions, and geographical factors. For example, increasing congestion and urban restrictions make it extremely hard to utilize similar equipment on city routes as one might use in the countryside or suburbs. An array of choices among cars, vans, trucks, and motorbikes exists. Nevertheless, the ideal type of vehicle allows full VFR (Vehicle Fill Rate), and reduces time as well as costs spent on the road. This assists your last mile deliveries.

Remembering Reverse Logistics

Simply put, reverse logistics usually involve the process of delivering desired goods to clients, getting and sending back unwanted products. Because around 30% of products ordered online tend to be returned in comparison to roughly 8.89% in the brick-and-motor stores, it means that delivery of your products doesn’t put your job to an end.

Therefore, reverse logistics demands utilizing with an excellent return plan. Anything contrary to this will drastically increase the last-mile delivery costs.


About Author

Katherine Husmith

Katherine Husmith is an Internet business analyst and business builder that publishes the Business Builder Report, distributes software and ebook publications.

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